OVERVIEW

Net sales for Land O'Lakes, Inc. and subsidiaries (the "Company") in 2000 were $5.8 billion, increasing $.2 billion or three percent compared with 1999. The increase was primarily attributed to the January 2000 acquisition of Madison Dairy Produce Co. ("Madison Dairy"), the formation of a feed joint venture with Farmland Industries, Inc. ("Farmland") in October 2000 and the acquisition of numerous seed companies during the year. Volume growth within each of Land O'Lakes business segments and improved commodity prices for market hogs also contributed to the sales increase.

The sale of fluid dairy assets in July 2000 and the formation of Agriliance, LLC ("Agriliance"), a new venture between Land O'Lakes, Cenex Harvest States Cooperatives ("CHS") and Farmland, limited the Company's sales growth to three percent in 2000. If the effects of divestitures and the formation of Agriliance were excluded from both 2000 and 1999, net sales were $4.7 billion in 2000 or 11 percent greater than a year ago.

Net earnings were $102.9 million in 2000 compared with $21.4 million in 1999, an increase of $81.5 million. The earnings improvement in 2000 mainly resulted from the effects of more stable market prices for cheese products, higher market prices for hogs, incremental gains from the divestiture of businesses and first-year contributions from acquisitions and joint ventures. Moderate changes in cheese market prices during 2000 were in sharp contrast to a year ago when major market fluctuations resulted in significant inventory write-downs. The earnings increase in 2000 was partially offset by restructuring and impairment charges and by losses associated with repositioning the agronomy retail distribution assets acquired in 1999.